Home Health, News, Payment/economy

PPS final rule increases agencies’ payments for 2019, finalizes PDGM

CMS has finalized a plan to launch a budget-neutral payment model for home health that utilizes 30-day payment periods and stops using the number of therapy visits to determine payment. That’s according to the 2019 PPS final rule posted Oct. 31 on the Federal Register website.

The Patient-Driven Groupings Model (PDGM) will launch “on or after” Jan. 1, 2020, according to the final rule. That language differs from the proposed rule, when CMS indicated PDGM would start on Jan. 1, 2020.

Another major change within the final rule is that PDGM will have 432 HHRGs — double the number of HHRGs outlined in the proposed rule.

That change is because CMS is finalizing 12 clinical groups that capture the most common primary reasons in home health. In the proposed rule, CMS only had sought six clinical groups: musculoskeletal rehabilitation, neuro/stroke rehabilitation, wounds, behavioral health care, complex nursing interventions and medication management, teaching and assessment (MMTA).

MMTA is the clinical group with the highest average resource use under PDGM. According to the proposed PPS rule, MMTA was used in 55.2% of periods.

“We note that although we are categorizing patients into [12] groups according to the principal diagnosis, these groups do not reflect all the care being provided to the home health patient during a 30-day period of care,” CMS states in the final rule. “Home health care remains a multidisciplinary benefit. Additionally, as stated in the CY 2019 HH PPS proposed rule, we will continue to examine trends in reporting and resource utilization to determine if future changes to the clinical groupings are needed after implementation of the PDGM in CY 2020.”
By comparison, the PPS only has 153 HHRGs.

Comorbidity adjustments will fall into one of three categories: no, low or high.

Despite the fact that payment episodes under PDGM will be shorter than under the PPS, LUPAs still occur can occur. But unlike with the PPS, where a LUPA involves four or fewer visits during an episode, the threshold for the number of visits needed for an episode to be a LUPA under PDGM will vary.

Payments to rise in 2019

Adjustments to Medicare’s home health payments under the final rule will increase agencies’ total reimbursement by 2.2%, or $420 million.
The increase reflects the effects of a 2.2% home health payment update percentage; a 0.1% increase in payments due to decreasing the fixed-dollar-loss ratio in order to pay no more than 2.5% of total payments as outlier payments; and a 0.1% decrease in payments due to the new rural add-on policy mandated by the Bipartisan Budget Act of 2018.

By comparison, the 2018 PPS final rule included a 0.4%, or $80 million, payment reduction.

The final rule also opens the door for home health agencies to get paid by Medicare Part B to administer home infusion therapy for certain patients who don’t qualify for the home health benefit. That change would not benefit home health agencies until 2021.

Other changes finalized in the rule

No more requirement for a physician estimate. CMS has decided to eliminate the requirement that the certifying physician estimate how much longer skilled services are required when recertifying the need for continued care. That change is effective for recertifications made on and after Jan. 1, 2019.

Value-based purchasing changes. Among the biggest changes to value-based purchasing are CMS’ decision to remove two OASIS-based measures and replace three other, existing OASIS-based measures with two new composite measures designed to evaluate improvement in activities of daily living (ADLs).

Remote patient monitoring update. CMS is “promoting innovation and modernization of home health care by allowing the cost of remote patient monitoring to be reported by home health agencies as allowable costs on the Medicare cost report form,” CMS states in a release about the final rule. “This is expected to help foster the adoption of emerging technologies by home health agencies and result in more effective care planning, as data are shared among patients, their caregivers and their providers.

Featured Free Resource

Are you prepared to prevent financial burden under PDGM? To ensure success, agencies must take actionable steps now to fully understand exactly how the new Patient-Driven Groupings Model will impact coding scenarios and how these updates will affect revenue cycle.

Free Resources

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The way agencies get paid and aspects of almost all areas of business will completely shift under the new Patient-Driven Groupings Model (PDGM). We’ve partnered with industry experts and rounded up crucial action-items you won’t want to overlook as you prepare for this massive change.

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